Dash To Trash

What is ‘Dash To Trash’

When investors flock to a class of securities or other assets, bidding up prices to beyond what can be justified by valuation or other fundamental measures. While the dash-to-trash effect can occur within any type of security, the phrase is typically used to describe low-quality stocks and high-yield bonds, both of which can be subject to periods of overbuying in the markets.

Explaining ‘Dash To Trash’

As the name graphically implies, investors are buying low-quality assets or assets that do not correctly price in the risks associated with them. The dash to trash often occurs near the end of a prolonged bull market, when investors begin to seek higher returns regardless of the risks involved. The longer it has been since a market downturn, the more likely it becomes that large pockets of investors will feel bulletproof.

Further Reading

  • Policy watch: infrastructure investment and economic growth – www.aeaweb.org [PDF]
  • The revictimization of companies by the stock market who report trade secret theft under the Economic Espionage Act – www.jstor.org [PDF]
  • Different aspects of cage culture management for sustainable fish production – eprints.cmfri.org.in [PDF]